Conditionality

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UK MPs hold hearing on World Bank, IMF

15 November 2004

In November the UK International Development Committee held its annual evidence session on the World Bank and IMF. MPs questioned the secretary of state for international development Hilary Benn and top civil servants from the Department for International Development and the Treasury. The Bretton Woods Project and ActionAid were invited to participate, the first time that civil society groups had been asked to do so.

Tony Worthington MP asked if the World Bank placed any obstacles in the way of parliamentary scrutiny of national development strategies. Benn responded that there was “nothing to stop involving parliaments in PRSPs”. ActionAid senior policy adviser Patrick Watt questioned this. Watt pointed to the continuing need for national development strategies to receive World Bank board approval; the failure to disclose key documents; and specific cases where Bank influence had led to legislation being overturned.

Referring to the recent official evaluations of the poverty reduction strategy process, John Barrett MP asked what lessons had been learned. Benn pointed to a number of lessons including ensuring that those who “ought to be involved actually are”, and that plans are not made “for the purpose of making donors happy”. Jeff Powell of the Bretton Woods Project pointed out that the evaluations emphasised the need for the Bank and Fund to be more open to alternative macro-economic policy options.

John Battle MP feared that there was a tendency on the part of the Bank to “pull everything to the centre and tell the rest of the world how to do it”. He cited Country Policy Institutional Assessments (CPIA) as an example of this. Benn said it “makes sense” for the Bank to have criteria for lending, but that if people felt this was something that should be looked at then he would agree to do so. Powell called for full disclosure of the CPIA, and for an independent assessment of the validity of the ratings in terms of actual results in economic growth and poverty reduction (see at issue: The World Bank’s policy scorcard).

Drawing on written evidence submitted by ChristianAid, Hugh Bayley MP asked why African countries were being forced to forego HIV/AIDS money supposedly because the funds might push public expenditure beyond IMF-imposed ceilings. Stephen Pickford, director of international finance at the Treasury, assured him that the UK had “made the point for increased flexibility” and believed there was evidence of increased flexibility on the part of the Fund.

Mr Bayley pushed the government to improve its transparency in its dealing with the IFIs. In response, the secretary of state agreed to a number of measures recommended in a written submission from the Bretton Woods Project.

Other issues discussed included: impact assessments and safeguards, trade conditionality, the International Financing Facility, leadership selection, board composition and voting weight, and DFID’s institutional strategy paper for the World Bank.

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The Bretton Woods Project is a UK-based NGO that challenges the World Bank and IMF and promotes alternative approaches. We serve as an information provider, watchdog, networker and advocate. Our flagship publications are the Bretton Woods Observer, a quarterly critical review of developments at the World Bank and IMF, and the Bretton Woods Bulletin, an online update of news and action on the institutions.